Posted on Mar 18, 2019
According to the British Chamber of Commerce (BCC) UK companies look set to cut investment by the most in 10 years in 2019 because of Brexit, with investment forecast to fall by 1% in 2019.
“Political inaction has already had economic consequences, with many firms hitting the brakes on investment and recruitment decisions,” Adam Marshall, the BCC’s director general, said.
“Worse still, some companies have moved investment and growth plans as part of their contingency preparations. Some of this investment may never come back to the UK.”
Many financial firms have set up operations in other EU countries and carmakers have reduced their expansion plans in Britain. BMW said this month it could move some output in the event of a no-deal Brexit.
In 2018, business investment fell in each of the four calendar quarters, the longest such run since the global financial crisis, official figures have shown.
Finance minister Philip Hammond says he expects a pickup in investment by companies once a Brexit deal is done.
However, the BCC said that the diversion of resources to prepare for the risk of a no-deal Brexit and the high up-front costs of doing business in Britain, as well as questions over Britain’s future ties to the EU, would limit any quick investment rebound.
The BCC lowered its overall growth forecast for Britain’s economy to 1.2 % in 2019 - in line with the Bank of England’s latest forecast - from a previous estimate of 1.3%.
That would be the economy’s weakest growth in a decade, reflecting a slowdown in the global economy as well as Brexit.
Follow EU Today on Social media: